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Economy

Latest dire predictions about Carney’s emissions cap

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5 minute read

From the Fraser Institute

By Kenneth P. Green

According to a new report from the Parliamentary Budget Officer (PBO), the federal government’s proposed oil and gas emissions cap will curtail production, cost a not-so-small fortune and kill a lot of jobs. This news will surprise absolutely no one who’s been paying attention to Ottawa’s regulatory crusade against greenhouse gases over the past few years.

To be precise, according to the PBO’s report of March 2025, under the proposed cap, production for upstream industry oil and gas subsectors must be reduced by 4.9 per cent relative to their projected baseline levels out to 2030/32. Further, required reduction in upstream oil and gas sector production levels will lower GDP (inflation-adjusted) in Canada by an estimated 0.39 per cent in 2032 and reduce nominal GDP by $20.5 billion. And achieving the legal upper bound will reduce economy-wide employment in Canada by an estimated 40,300 jobs and fulltime equivalents by 54,400 in 2032.

The federal government is contesting the PBO’s estimates, with Jonathan Wilkinson, federal minister of Energy and Natural Resources of Canada, claiming that the “PBO wasted their time and taxpayer dollars by analyzing a made up scenario.” Of course, one might observe that using “made up scenarios” is what making forecasts of regulatory costs is all about. No one, including the government, has a crystal ball that can show the future.

But the PBO’s projected costs are only the latest analysis. 2024 report by Deloitte (and commissioned by the federal Treasury Board) found that the proposed “cap results in a significant decline in GDP in Alberta and the Rest of Canada.” The main impacts of the cap are lower oil and gas activity and output, reduced employment, reduce income, lower returns on investment and a higher price of oil.

Consequently, according to the report, by 2040 Alberta’s GDP will be lower by 4.5 per cent and Canada’s GDP will be lower by 1 per cent compared to a no-cap baseline. Cumulatively over the 2030 to 2040 timeline, Deloitte estimated that real GDP in Alberta will be $191 billion lower, and real GDP in the Rest of Canada will be $91 billion lower compared to the no-cap (business as usual) baseline (in 2017 dollars). Employment also took a hit in the Deloitte report, which found the level of employment in 2040 will be lower by 2 per cent in Alberta and 0.5 per cent in the Rest of Canada compared to a no-cap baseline. Alberta will lose an estimated 55,000 jobs on average (35,000 in the Rest of Canada) between 2030 and 2040 under the cap.

Another 2024 report by the Conference Board of Canada estimated that the “oil and gas productions cuts forecasted lead to a one-time, permanent decline in total Canadian real GDP of between 0.9 per cent (most likely outcome) to 1.6 per cent (least likely outcome) relative to the baseline in 2030. This is equivalent to a loss of $22.8 to $40.4 billion (in 2012 dollars)… In Alberta, real GDP would fall by between $16.3 and $28.5 billion—or by 3.8 per cent and 6.7 per cent, respectively.”

Finally, a report by S&P Global Commodity Insights (and commissioned by the Canadian Association of Petroleum Producers) estimated that a “production cut driven by a stringent 40% emission cap could cause $75 billion lower upstream spend and $247 billion lower GDP contribution (vs. a no cap reference case).”

All of these estimates, by respected economic analysis firms, raise serious questions about the government’s own 2024 Regulatory Impact Analysis, which suggested that the proposed regulations will only have incremental impacts on the economy—namely, $3.3 billion (plus administrative costs to industry and the government, estimated to be $219 million). According to the analysis, the “proposed Regulations are expected to result in a net decrease in labour expenditure in the oil and gas sector of about 1.6% relative to the baseline estimate of employment income over the 2030 to 2032 time frame.”

But according to the new PBO report, the costs of the government’s proposed cap on greenhouse gas emission from Canada’s oil and gas sector will be costly and destructive to the sector, it’s primary province (Alberta), and its employees in Alberta and across Canada. All this in the face of likely-resurgent U.S. oil and gas production.

Now that policymakers in Ottawa have seemingly recognized the unpopularity of the consumer carbon tax, a good next step would be to scrap the cap.

Alberta

COWBOY UP! Pierre Poilievre Promises to Fight for Oil and Gas, a Stronger Military and the Interests of Western Canada

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Fr0m Energy Now

By Maureen McCall

As Calgarians take a break from the incessant news of tariff threat deadlines and global economic challenges to celebrate the annual Stampede, Conservative party leader Pierre Poilievre gave them even more to celebrate.

Poilievre returned to Calgary, his hometown, to outline his plan to amplify the legitimate demands of Western Canada and not only fight for oil and gas, but also fight for the interests of farmers, for low taxes, for decentralization, a stronger military and a smaller federal government.

Speaking at the annual Conservative party BBQ at Heritage Park in Calgary (a place Poilievre often visited on school trips growing up), he was reminded of the challenges his family experienced during the years when Trudeau senior was Prime Minister and the disastrous effect of his economic policies.

“I was born in ’79,” Poilievre said. “and only a few years later, Pierre Elliott Trudeau would attack our province with the National Energy Program. There are still a few that remember it. At the same time, he hammered the entire country with money printing deficits that gave us the worst inflation and interest rates in our history. Our family actually lost our home, and we had to scrimp and save and get help from extended family in order to get our little place in Shaughnessy, which my mother still lives in.”

This very personal story resonated with many in the crowd who are now experiencing an affordability crisis that leaves families struggling and young adults unable to afford their first house or condo. Poilievre said that the experience was a powerful motivator for his entry into politics. He wasted no time in proposing a solution – build alliances with other provinces with mutual interests, and he emphasized the importance of advocating for provincial needs.

“Let’s build an alliance with British Columbians who want to ship liquefied natural gas out of the Pacific Coast to Asia, and with Saskatchewanians, Newfoundlanders and Labradorians who want to develop their oil and gas and aren’t interested in having anyone in Ottawa cap how much they can produce. Let’s build alliances with Manitobans who want to ship oil in the port of Churchill… with Quebec and other provinces that want to decentralize our country and get Ottawa out of our business so that provinces and people can make their own decisions.”

Poilievre heavily criticized the federal government’s spending and policies of the last decade, including the increase in government costs, and he highlighted the negative impact of those policies on economic stability and warned of the dangers of high inflation and debt. He advocated strongly for a free-market economy, advocating for less government intervention, where businesses compete to impress customers rather than impress politicians. He also addressed the decade-long practice of blocking and then subsidizing certain industries. Poilievre referred to a famous quote from Ronald Reagan as the modus operandi of the current federal regime.

“The Government’s view of the economy could be summed up in a few short phrases. If anything moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

The practice of blocking and then subsidizing is merely a ploy to grab power, according to Poilievre, making industry far too reliant on government control.

“By blocking you from doing something and then making you ask the government to help you do it, it makes you reliant. It puts them at the center of all power, and that is their mission…a full government takeover of our economy. There’s a core difference between an economy controlled by the government and one controlled by the free market. Businesses have to clamour to please politicians and bureaucrats. In a free market (which we favour), businesses clamour to impress customers. The idea is to put people in charge of their economic lives by letting them have free exchange of work for wages, product for payment and investment for interest.”

Poilievre also said he plans to oppose any ban on gas-powered vehicles, saying, “You should be in the driver’s seat and have the freedom to decide.” This is in reference to the Trudeau-era plan to ban the sale of gas-powered cars by 2035, which the Carney government has said they have no intention to change, even though automakers are indicating that the targets cannot be met. He also intends to oppose the Industrial Carbon tax, Bill C-69 the Impact Assessment Act, Bill C-48 the Oil tanker ban, the proposed emissions cap which will cap energy production, as well as the single-use plastics ban and Bill C-11, also known as the Online Streaming Act and the proposed “Online Harms Act,” also known as Bill C-63. Poilievre closed with rallying thoughts that had a distinctive Western flavour.

“Fighting for these values is never easy. Change, as we’ve seen, is not easy. Nothing worth doing is easy… Making Alberta was hard. Making Canada, the country we love, was even harder. But we don’t back down, and we don’t run away. When things get hard, we dust ourselves off, we get back in the saddle, and we gallop forward to the fight.”

Cowboy up, Mr. Poilievre.

Maureen McCall is an energy professional who writes on issues affecting the energy industry.

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Alberta

Alberta and Ontario sign agreements to drive oil and gas pipelines, energy corridors, and repeal investment blocking federal policies

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Alberta-Ontario MOUs fuel more pipelines and trade

Alberta Premier Danielle Smith and Ontario Premier Doug Ford have signed two memorandums of understanding (MOUs) during Premier Ford’s visit to the Calgary Stampede, outlining their commitment to strengthen interprovincial trade, drive major infrastructure development, and grow Canada’s global competitiveness by building new pipelines, rail lines and other energy and trade infrastructure.

The two provinces agree on the need for the federal government to address the underlying conditions that have harmed the energy industry in Canada. This includes significantly amending or repealing the Impact Assessment Act, as well as repealing the Oil Tanker Moratorium Act, Clean Electricity Regulations, the Oil and Gas Sector Greenhouse Gas Emissions Cap, and all other federal initiatives that discriminately impact the energy sector, as well as sectors such as mining and manufacturing. Taking action will ensure Alberta and Ontario can attract the investment and project partners needed to get shovels in the ground, grow industries and create jobs.

The first MOU focuses on developing strategic trade corridors and energy infrastructure to connect Alberta and Ontario’s oil, gas and critical minerals to global markets. This includes support for new oil and gas pipeline projects, enhanced rail and port infrastructure at sites in James Bay and southern Ontario, as well as end-to-end supply chain development for refining and processing of Alberta’s energy exports. The two provinces will also collaborate on nuclear energy development to help meet growing electricity demands while ensuring reliable and affordable power.

The second MOU outlines Alberta’s commitment to explore prioritizing made-in-Canada vehicle purchases for its government fleet. It also includes a joint commitment to reduce barriers and improve the interprovincial trade of liquor products.

“Alberta and Ontario are joining forces to get shovels in the ground and resources to market. These MOUs are about building pipelines and boosting trade that connects Canadian energy and products to the world, while advocating for the right conditions to get it done. Government must get out of the way, partner with industry and support the projects this country needs to grow. I look forward to working with Premier Doug Ford to unleash the full potential of our economy and build the future that people across Alberta and across the country have been waiting far too long for.”

Danielle Smith, Premier of Alberta

“In the face of President Trump’s tariffs and ongoing economic uncertainty, Canadians need to work together to build the infrastructure that will diversify our trading partners and end our dependence on the United States. By building pipelines, rail lines and the energy and trade infrastructure that connects our country, we will build a more competitive, more resilient and more self-reliant economy and country. Together, we are building the infrastructure we need to protect Canada, our workers, businesses and communities. Let’s build Canada.”

Doug Ford, Premier of Ontario

These agreements build on Alberta and Ontario’s shared commitment to free enterprise, economic growth and nation-building. The provinces will continue engaging with Indigenous partners, industry and other governments to move key projects forward.

“Never before has it been more important for Canada to unite on developing energy infrastructure. Alberta’s oil, natural gas, and know-how will allow Canada to be an energy superpower and that will make all Canadians more prosperous. To do so, we need to continue these important energy infrastructure discussions and have more agreements like this one with Ontario.”

Brian Jean, Minister of Energy and Minerals

“These MOUs with Ontario build on the work Alberta has already done with Saskatchewan, Manitoba, Northwest Territories and the Port of Prince Rupert. We’re proving that by working together, we can get pipelines built, open new rail and port routes, and break down the barriers that hold back opportunities in Canada.”

Devin Dreeshen, Minister of Transportation and Economic Corridors

“Canada’s economy has an opportunity to become stronger thanks to leadership and steps taken by provincial governments like Alberta and Ontario. Removing interprovincial trade barriers, increasing labour mobility and attracting investment are absolutely crucial to Canada’s future economic prosperity.”

Joseph Schow, Minister of Jobs, Economy, Trade and Immigration

Together, Alberta and Ontario are demonstrating the shared benefits and opportunities that result from collaborative partnerships, and what it takes to keep Canada competitive in a changing world.

Quick facts

  • Steering committees with Alberta and Ontario government officials will be struck to facilitate work and cooperation under the agreements.
  • Alberta and Ontario will work collaboratively to launch a preliminary joint feasibility study in 2025 to help move private sector led investments in rail, pipeline(s) and port(s) projects forward.
  • These latest agreements follow an earlier MOU Premiers Danielle Smith and Doug Ford signed on June 1, 2025, to open up trade between the provinces and advance shared priorities within the Canadian federation.

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